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Reid says he will try again to push Watt nomination

WASHINGTON—The Senate voted to the nomination of Rep. Mel Watt, D-N.C. to head the Federal Housing Finance Agency to oversee mortgage lenders Fannie Mae and Freddie Mac at a critical time for the industry.

WASHINGTON —Senate Majority Leader Harry Reid, D-Nev., vowed to try again after Senate Republicans on Thursday blocked the nomination of Rep. Mel Watt, D-N.C., to head the agency that oversees mortgage lenders Fannie Mae and Freddie Mac at a critical time for the industry.

"Republicans' unprecedented obstruction continued today with a step that we have not seen since the Civil War," Reid said.

Democrats fell three votes shy of the 60 required to advance his nomination to lead the Federal Housing Finance Agency. White House spokesman Jay Carney called the vote "enormously disappointing" and said the president is hopeful Watt can be confirmed in the future.

President Obama nominated the North Carolina Democrat in May to replace acting FHFA director Edward DeMarco. Thursday's filibuster marked the first time since the Civil War that a sitting member of Congress was denied a presidential nomination by the Senate.

Senate Republicans opposed Watt's nomination because they prefer the policies advanced by DeMarco, who has been targeted by liberal Democrats and activists for not doing more to aid homeowners facing foreclosure. Only two Republican senators broke with their party to support Watt: Rob Portman of Ohio and Richard Burr of North Carolina.

Republicans argue that DeMarco saved taxpayers money. Watt opponents said they feared the 11-term congressman would advance more costly policies. "I think this is the wrong job for this good man," said Sen. Pat Toomey, R-Pa., who supported the GOP filibuster, citing the far-reaching authority granted the FHFA director. "There is no parallel in our country for an institution where so much power is concentrated in one person."

Toomey also questioned Watt's credentials, citing a previous comment made by Watt in which he said he didn't understand derivatives, a controversial financial instrument. Toomey also said Watt supported the policies that "helped drive Fannie and Freddie into the conservatorship that cost taxpayers so much money."

Watt is a veteran member of the House Financial Services Committee and Democrats hailed his credentials. "Mel Watt is the right man for the job," said Sen. Elizabeth Warren, D-Mass."When it comes to housing, Congressman Watt has seen it all, and Congressman Watt has shown good judgment throughout it all."

Watt was also strongly supported by civil rights groups and the Congressional Black Caucus, of which he is a member. Those groups decried the filibuster. "Mel Watt is a sitting member of Congress with the support of the realtors, the Mortgage Bankers Association, the homebuilders, consumer groups and civil rights advocates; today's filibuster came from the most broken Senate in modern history," said Nancy Zirkin, executive vice president of The Leadership Conference on Civil and Human Rights.

The nomination was also dragged down by a brewing internal political fight over all presidential nominees.

Just after the Watt vote, Senate Republicans also filibustered Obama's nomination for Patricia Millett to serve on the D.C. circuit court.

Senate Majority Leader Harry Reid, D-Nev., has warned Republicans that he might again try to advance a controversial procedural rules change to confirm presidential appointees with 51 votes instead of 60 votes. It is a particularly divisive proposal for judicial nominations.

Republicans say that doing so would tear the institution apart, which is why is it informally called the "nuclear option."

"We will destroy the very fabric of the United States Senate and that is that it requires a larger than numerical majority in order to govern," said Sen. John McCain, R-Ariz., in protest of Reid's threat to change the rules.

Reid said he intends to bring both nominations back to the floor "in the very near future."

He added: "Something has to change, and I hope we can make the changes necessary through cooperation."